Key Takeaways
- 6 month policies give you an advantage of having your rates refreshed more often which can lower your rates over time or make them higher quicker
- 12-month car insurance policies refresh your rates over a longer period, but if your driving record changes, you’ll have locked in rates for longer and more insulation to policy price changes.
- When choosing between a six-month vs. a 12-month auto insurance policy, you should decide whether your priority is flexibility or locked-in rates.
Compare Car Insurance Rates
Answer a few simple questions to save money on your policy
Check Availability With our comparison partner, 
×
Compare Car Insurance Rates
Get matched with a top provider and compare instant quotes in just a few clicks
Learn more about our methodology and editorial guidelines.
6-Month vs. 12-Month Auto Insurance Policy: Overview
The length of time an auto insurance policy is in effect is called the policy term. While temporary car insurance does not exist, most insurers offer at least two term lengths: six months and 12 months. A six-month car insurance policy comes up for renewal twice a year, while customers with annual car insurance can renew their policies every 12 months.
Both kinds of policies function in the same manner. Your car is protected for the entire policy term whether you choose six months or a full year. Most insurers offer payment plans, meaning you can choose to pay your car insurance premium in monthly installments or all at once. Depending on your provider, you may be eligible for a car insurance discount if you pay your entire premium up front.
What Are the Benefits of a 12-Month Car Insurance Policy?
The nice thing about having a 12-month term is that your car insurance rate will be locked in for an entire year, so you’ll know what to expect from month to month. If you opt to pay your premium annually, you won’t need to worry about monthly payments at all.
Having an annual policy can also make budgeting simpler. Keep in mind, though, that your rates will change if you add or remove a driver or vehicle from your policy.
What Are the Benefits of a 6-Month Car Insurance Policy?
A six-month policy allows for a bit more flexibility than a 12-month policy. Auto insurance companies revise rates at the end of the policy period, so the cost of your insurance coverage may decrease more quickly. If you haven’t filed a claim or you have traffic infractions fall off of your record before you renew your policy, you may get a lower rate when it’s time to renew.
Is a 6-Month Policy Cheaper Than a 12-Month Policy?
In the sections below, we’ll take a look at how much liability-only and full-coverage policies cost for six-month and 12-month terms. We used data from Quadrant Information Services to find average prices. These rates are based on a married 35-year-old driver with good credit and a clean driving record.
Based on our research, we found that USAA has the cheapest six-month and 12-month car insurance policies on average. Of the large providers we looked at, Farmers tends to have the most expensive coverage.
Average 6-Month-Policy Costs
Below is a table with average costs for a six-month auto insurance policy.
| Provider | Average Cost for a Six-Month Liability Policy | Average Cost for a Six-Month Full-Coverage Policy |
|---|---|---|
| Nationwide | $438 | $1,031 |
| Erie Insurance | $327 | $947 |
| USAA | $235 | $870 |
| Travelers | $345 | $846 |
| Geico | $310 | $997 |
| State Farm | $430 | $1,272 |
| American Family Insurance | $627 | $1,350 |
| Progressive | $429 | $1,163 |
| Allstate | $597 | $1,670 |
| Farmers | $648 | $1,747 |
Page 1 of
Average 12-Month-Policy Costs
Below is a table with average costs for a 12-month auto insurance policy.
| Provider | Average Cost for a 12-Month Liability Policy | Average Cost for a 12-Month Full-Coverage Policy |
|---|---|---|
| Nationwide | $877 | $2,063 |
| Erie Insurance | $655 | $1,894 |
| USAA | $471 | $1,741 |
| Travelers | $691 | $1,692 |
| Geico | $620 | $1,995 |
| State Farm | $861 | $2,544 |
| American Family Insurance | $1,254 | $2,700 |
| Progressive | $859 | $2,326 |
| Allstate | $1,194 | $3,340 |
| Farmers | $1,296 | $3,495 |
Page 1 of
Factors That Affect Car Insurance Costs
Insurance agents weigh a few factors when calculating car insurance quotes:
- Location: Areas with statistically higher rates of accidents and theft tend to have higher auto insurance premiums.
- Age: Younger drivers have less experience behind the wheel and are considered higher risks, so they tend to pay more for auto insurance.
- Driving record: Motorists with at-fault accidents, DUIs, speeding tickets or other moving violations in their driving history usually pay more for coverage.
- Credit history: Drivers with poor credit tend to pay higher rates than those with higher credit scores.
- Gender: Statistically, male drivers are more likely to get in car accidents than female drivers, so men often pay more for car insurance.
- Marital status: Married drivers typically pay less for auto insurance than single drivers.
- Vehicle: Because new cars and more expensive vehicles cost more to repair, they tend to be more expensive to insure.
The Bottom Line: 6-Month vs. 12-Month Auto Insurance
Aside from the length of the policy, there isn’t much of a difference between six-month and 12-month auto insurance. Six-month policies allow for a bit more flexibility as well as a chance to secure lower rates sooner. Twelve-month policies help for budgeting since policyholders only see rate increases during the year if they add another vehicle or driver.
Top Auto Insurance Recommendations
Our team reviewed the top auto insurance providers in the nation. To find the best rates for your insurance needs, compare quotes from multiple insurers.
State Farm: Best Customer Experience
Over the years, State Farm has developed a strong reputation for low rates and excellent customer service. Young drivers can find affordable rates with State Farm, as the company offers a large discount for good students. In addition, the State Farm Drive Safe and Save™ telematics insurance program offers discounts for people who practice safe driving habits.
Keep reading: State Farm Insurance Review
Nationwide: Best for Usage-Based Insurance
Based on our research, we’ve found that Nationwide often offers some of the cheapest car insurance. An average full-coverage policy from Nationwide can be as much as 40% cheaper than the national average. The company also offers a wide variety of discounts, including their usage-based insurance program, SmartRide®.
Keep reading: Nationwide Insurance Review
Source: Automoblog
Compare Car Insurance Rates
Get matched with a top provider and compare instant quotes in just a few clicks
With our comparison partner, 
6-Month vs. 12-Month Auto Insurance: FAQ
In general, paying your car insurance premium annually rather than monthly is the cheapest option. Providers incur processing costs if you pay your premium in installments, and those costs get folded into your monthly payment. Most insurers offer a discount if you pay in full because it keeps their costs down.
If you have a six-month policy, the cost of coverage could go down when you renew. This isn’t a guarantee, however, and it depends on a few factors. If you have any traffic violations that fall off of your driving record or if you haven’t filed a claim, your rates may decrease. But if you get into an at-fault accident or get a speeding ticket, your rates will likely increase after six months.
Six-month policy terms allow insurance companies to reevaluate the cost of your coverage more frequently.
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides.com.
